DFS SUPERINTENDENT ADRIENNE A. HARRIS ADOPTS COMMUNITY REINVESTMENT ACT REGULATION TO IMPROVE LENDING TO MINORITY- AND WOMEN-OWNED BUSINESSES
Regulation Aims to Ensure Equitable Access to Credit
Superintendent of Financial Services Adrienne A. Harris announced today that the New York State Department of Financial Services (DFS) has adopted an update to the Community Reinvestment Act (CRA) regulation, following the revised proposal published in October 2022. This updated regulation implements amendments to Banking Law § 28-b enacted in 2019, allowing DFS to collect data to evaluate how well New York-regulated banking institutions are serving minority- and women-owned businesses in their communities and integrate its findings into institutions’ CRA ratings.
“The Community Reinvestment Act is meant to ensure banks are meeting the credit needs of their entire community,” said Superintendent Harris. “This revised regulation enables DFS to obtain the data necessary to verify that banks are providing equitable access to credit to minority- and women-owned businesses, and to hold them accountable when they do not.”
Senator James Sanders Jr. said, "I applaud Superintendent Adrienne Harris and the New York State Department of Financial Services for implementing the legislation sponsored by Majority Leader People-Stokes and myself. The law ensures that the Department of Financial Services assesses a banking institution’s record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods and minority- and women-owned businesses. Financial institutions should be recognized and rewarded for their worthy efforts."
“I applaud Superintendent Harris and the Department of Financial Services for updating regulations implementing the Community Reinvestment Act to ultimately bolster lending opportunities available to MWBEs. Whether it’s a lifeline to stay afloat or taking the next step towards expansion, access to lending is critical. Small businesses are the backbones of communities, so strengthening MWBE’s and other small businesses strengthens New York State’s economy,” Assembly Majority Leader Crystal Peoples-Stokes stated.
Among its provisions, the final regulation details how institutions must collect and submit the necessary data to DFS while abiding by fair lending laws. Banks will be required to report to the Department the details of applications, such as whether the applicant is a minority-owned business, a women-owned business, or both; the date of application; type of credit applied for and amount; and whether the application was approved or denied; as well as; the size of the business; and the location of the business. The final regulation also contains a form that banking institutions may use with business loan applicants to obtain the required data. The Department will publish a data submission template in the coming months for institutions to use during CRA evaluations.
The regulation will take effect on August 8, 2023. A copy can be found on the DFS website.